CUTTING EDGE CONFERENCE - DAY 2

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I think we are live. Let's, let's go. Welcome everyone to day two of the Cutting edge conference. I appreciate you all being here and thank you for coming back for another day. This one's gonna be a little bit longer than yesterday. It's also gonna be a little bit of a different style presentation. I'd really recommend while I'm talking here that you go and get on a larger screen. We're gonna be having a guest on the day speaking with myself and we're gonna be going through numbers. We're probably gonna go through Excel spreadsheets and some like fine details. So if you're watching on a mobile device in the next minute or two, if you can get, or even next five minutes, because I'll probably chat with him for a little bit beforehand, go watch this on a tv, a bigger screen, a desktop or a laptop. Something more than a mobile device would be highly recommended on this size screen. It's going to be kind of tough for you to see what's going on, especially if we start going through some numbers. So highly recommend you get on a larger device for today's keynote. Like I said, this is gonna be a bit of a different presentation. Yesterday we had talked a lot more high energy marketing, advertising, more offense, which is great and we love it and we love upsells and we love those at Copilot, the new features that we just launched. However, there's also to every great football team, you have to have offense and you have to have defense and defenses. You can't lose your shirt on the deal. I don't care if you're Patrick for homes in terms of offense and you can score all the points in the world, but if you literally have no defense, you will lose money. And so today, yesterday was offense, today is defense. And we're going to be talking about job costing and price matrices and how you can never lose your shirt on a job again if you do them correctly. And this is knowing your numbers and everyone talks about knowing your numbers. They were going to dive into it pretty deep. And so it's going to get a little bit more dense than yesterday. But I just so recommend you stick with us. I know it's going to be tempting because there's not going to be pictures and graphics and slides and I'm not going to be yelling and screaming.

But this is important stuff. No one really, you know, you don't see the linebackers of a football team, the defensive lineman on like the front cover of newspapers and magazines. You see the quarterback the running back, the wide receivers, the offense, those are the more glamorous positions. And typically talking about marketing and new customers and even upselling like yesterday attracts a larger audience. But it is so important that you have the defensive lineman, because if you don't have the defensive lineman, we're going to have trouble ever protecting a touchdown or a field goal or any sort of points against our team. And I don't want to see you lose, get points scored against you, and in this case, point scored against you is you losing your shirt on a job when you think it was going to take $2000 and it ends up taking $5000. That, that $3000 loss is putting people out of business. And at larger size scales, if you're doing 50, $100,000 projects, those can really affect you and put you out of business and make you go bankrupt. I was just at someone last week, Literally, they told me, they said, this $30,000 job, if it goes wrong, I will go bankrupt. And though therefore I will be on this job the entire day, all the time, and I will not trust my crew to take over the project management of this job because I must make this job work. That's a lot of pressure and stress. It'd be so much better if you knew the pricing, you knew how to do estimates so that when you gave the estimate and the proposal, when it's accepted, you knew the job was going to make money, you knew it was going to make profit. And that's what I want to talk about today. I'm going to be bringing someone on today that is just an awesome person. Not only does he have a fantastic first name, great representation of the Mike brand, not only does he represent small people like myself very, very well, makes me proud. He gives back a lot to the community and he shares a lot of these nuts and bolts that don't get a lot of pizzazz and views on YouTube, but it's so important. So as much as you're going to be tempted to click off today because we start going drilling deep, just hang with me. Even if we start going down a path and for two or three minutes, you kind of zone out, just. Just hop back in. Even if you are having to do on a mobile device and you might not see all the numbers as we dig into some of the software and Excel and start figuring out some math, please just try to grasp the concepts of what we're talking about. It's so important. And I really do believe that this discussion that we have for the next hour or so is going to be extremely valuable and you might want to rewatch it. You definitely are going to want to take action on the things that we share today. And so without any further delay, let's go ahead and roll it. Let me get this set up real quick. It'll take me 10 seconds and it's going to be great. Here we go.

All right, thanks everyone for joining us today. I'm very honored to have David, the master of job costing and price matrices. And that's Mike Callahan from Simple Growth. Mike, before we jump in, maybe just give a quick bio for those who don't know you, what you do at Simple Growth and really kind of what makes you qualified to talk about job costing and price matrices.

Yeah, Mike, appreciate you having on everything you're doing for the green industry here and raising the level of professionalism. Quick, quick Background Owned a lawn and landscape company for about 27, 28 years in upstate New York. Ended up multi seven figure business, ended up exiting that business and got really in deep in the numbers as we went in through high school and college. Didn't really know my numbers, put my head down, grinded like everybody else. But eventually some of the stuff we got lucky enough to get right, some of the stuff honestly Mike, we got wrong. There was one year we lost a significant amount of money. So we dove in probably about 15 years ago, ballpark and really started to understand what it costs to operate, profit hour per guy, our break even numbers and what our revenue per hour was and the delta between those, the difference would be our bottom line, net profit. So we went in and in part of my journey becoming an absentee owner, I need to make sure the financials in my business made sense. So we went out and built pricing matrices with job costing, budgeted hours for all the services in my lawn care business. Long story short, we talked about it at the landscape Summit. But that original business through high school and college ended up getting married to my high school sweetheart. I was working 80 to 100 hours a week and that business literally caused a divorce. So my new mission right now in the lawn care and landscape industry is to help business owners take their life back from the business or hopefully avoid the mistakes that I made in the early years. So that's really as we dive in now. Simple Growth has been around now six years. We've got a team, about 25 full time people and eight or nine of them are all ex clients of Simple Growth who've gone and scaled their businesses and actually exited and come back behind that mission. So we Work with hundreds of businesses every year where we do software setup for job cost and price matrices as well as automations.

Now I assume when you got started with job costing, price matrices, etc. You didn't have the software at the time and probably using Excel. And so I think today that's what we're going to show. And the reason is because like regardless of what CRM or software you use, these are things that you can do in your business. We believe both Mike and myself, that software is going to make that easier. But let's go ahead and share some of the things you prepared, Mike, and talk about job costing and why it's so important. But before we jump into the actual numbers, I want to kind of go from more of a high level view and ask a few questions about how estimates work. And everyone always has like estimate system and everyone wants to create a system for everything. But can you kind of break down for me what are some of the different ways of doing estimates and which are most preferred and. And what are most common when it comes to any home service business? Yeah.

So Mike, as we also, we all start out, there's really three different ways we estimate. And I think yourself, myself, when we first started out, we started out with number one, we go up to a house as a basic lawn mowing example, mo, blow and edge. We're looking at that lot. We say, okay, what is my competitors charging for us? What will the market bear? So if we think, hey, that's a $65 cut, really, with no foundation, that's what we charge. Obviously that's not where we want to be. But you know that unfortunately that's where we all start out. At least I did and you probably did your. As we evolve, the next one is I like to call guesstimating. And really what guesstimate is is using your experience as an industry expert going out looking how long is it going to take to mow, stick, edge, weed, whack and blow that property? So if we're looking at that same property, it's going to take one hour for one guy or girl to do it. And our revenue per man hour goal, what we charge is $80. One hour times 80 bucks is we need to charge $80 for that job. And then eventually we go into a process, something called production rate based estimating. So in that same example, we'll be able to go into satellite imagery just like we can in Copilot, and actually measure the square footage of the turf and save that into a job variable, something we call A custom field, but on a very high level. We're going to be able to go in and set up a production rate based estimating system based on your guys and girls production and your equipment setup. So we can go in and measure that and now be able to delegate that to either an internal office, command center or virtual assistant somewhere halfway around the world. But by measuring that property, to be able to create a predictable SC scalable estimate that does not revolve around the business owner. And once we get into our job costing, whether it's guesstimating or the actual production rate based estimating, when we produce that estimate and turn it into a job, we're gonna have a price, a budgeted time that needs to be done and a cost before profit. All if everything works to plan our bottom line, net profit is where we project it to be.

Got it? So we got market based, time based and then production rate based. Now obviously in the perfect world, we're using the more sophisticated version of that pricing. But realistically when we come to the real world and where the rubber really hits the road, if you had to kind of give a rough either employee count or revenue per year that you see these three systems being used and when does it make sense to actually take the time to create and you'll go from what is your competitors, what are they charging versus labor based rate. Like when does it actually make sense to make that jump? Or should people be doing that from day one?

Yeah, I guess the, the answer there is really as soon as possible. I mean there's companies that come to us when we help set this up that they've never actually gotten into business yet. And they, they've come from other industries and know they need these numbers. So if you don't know what it costs you per hour, break even. That's a number you really, really need to know. Most of the businesses probably come in around 2 to 250,000, up to a half a million. But that being said, we have businesses come this to 3,3 million to 5 million in annual revenue. They don't know their numbers and they're literally at best guesstimating. I would say sooner the better. But about 250 to half a million is where we see most folks come in. And that's traditionally not in a full scale production rate based estimating. They're going in and literally going and basing on their experience. But the idea here is when we set this up in a software like Copilot, we, we can actually put in the time that we think it's going to take. And then the system will not emotionally calculate it. Because as you well know, Mike, we're in the spring season. We're trying to add 25 or 30 lawns this week to hit our sales goal. You and I are walking up and going, well, if I shave three or four dollars off that mo, I'm sure I'm going to get it, and that's going to help me get to my sales goal. And we unintentionally hurt ourselves. So truly answer your question. 250 to half million is usually where we see it. If you're watching this, I suggest going out and buying. Buy an education out. Learn your competition. Sooner the better with these numbers.

And then when it comes to actually implementing this in the business, whether it be software or doing Excel, why do you think that people don't do this? So, for example, is it for myself, is it the fact that I'm just too lazy to go figure out my production rates? Is it the fact that I'm not willing to do some time motion studies or clock my guys? Or is it the fact that I'm maybe afraid of software? What are the most common things that you see? So many. Obviously, oftentimes you're seeing owners coming to you looking for help. But why did they either have they not done it in the past or they decide not to do it and they stick with the old guesstimating model that so much of our competition uses?

Yeah, I guess there's a couple. So, I mean, literally work with hundreds of businesses a year. There's two or three common things we see. And honestly, I think after talking to these individuals, it's not that they don't know it or don't don't want to know it. They just don't. Like, they almost don't want to feel stupid. So they won't ask anybody, hey, what should I be doing here? And they're not going to ask their local competition, but if they ask their local competition, 99% of them don't have a clue either. So we're all in the same boat. The cool thing is with YouTube and all the stuff out there, like now, it's actually being talked about. But like I said, we've got companies, 3 to 5 million in annual revenue that realize they need to figure this out and they don't have it figured out. And they're like, you know what? We're playing Russian roulette with our financial future. Not even for ourselves, but our employees once in a while. That's going to happen. That chamber is going to be loaded and get you right in the face. So really, I think a lot of it is just, we know we need to do it as business owners, but we're scared to ask for help or actually go out and get the education. And, you know, hopefully step number two that we talk about is really going in and be able to work strategically in your business four hours a week, and that's 10%. Traditionally, as we get bigger, we want to get to 20% of our time as being strategic, working on it, not in, as Michael Gerber would say. So it's literally A, they're scared to ask for help, or B, they're in there just grinding and grinding, grinding on the truck, doing the estimates, fighting fires. And it never becomes a priority until we go in November, December, and look, and we lost 50, 60 thousand dollars this year. And we're like, wow, we need to fix this or get out of this business. So don't have the time. And a lot of times folks are embarrassed to ask for help around it. And I had to go out and hire a consultant to make sure the stuff that I built, my Excel sheet before we started to scale to a million and well beyond, was actually correct. The consultant about after three hours said, why did you hire me to fly me in? I go, well, if we're making this financial investment, I need to know these numbers are correct before I put this money in it. So even myself, I think in the early days, Mike, I was a little embarrassed to ask for helper to confirm that what I actually put together was correct. Lucky enough that it was based on some of the college classes I took, though.

Totally. And I think sometimes it's just a matter of not having the humility. Even if you grow in a big business, you can build a massive business on guesstimating, but it's a matter of luck and you. And you're not going to be able to pass that along to someone else. But it is somewhat humbling to say, hey, look, I am literally throwing a dart, a dartboard in terms of how long something's going to take. Or, you know, literally just that's $400. Like, that's kind of similar to Mr. Jones, who's $500 like that. Sort of like you can build a big business, but it's going to take a level of humility and learning and re educating yourself on something like a software Excel or even just looking at math. Like, no one enjoys math. We get it. But it might be necessary to actually systematize the business now, can you?

The other issue I had too is as you're looking at this, the old same good data in, good data out. That's usually not even the case. What it is is there's no data in, no data out. So when you're utilizing a software like Copilot, you want to be able to get that data in your hands. So even if they want to fix some of this, that's where we help a lot of people with industry production rates. Because a lot of times people think they have the data they need and when you actually go to look, it actually is not being put in into the software and Excel sheet or even pen and paper.

100%.

100%.

I want to actually kind of dive in and talk a little bit about what are some of the numbers that are financials that potentially someone would need to know before implementing price matrices. Whether it be on Copilot and Excel, I really don't care what software but like what are the numbers that are needed? Because if we're talking about inputs and outputs and what are those inputs or that data that is needed.

Yeah. So really as you're getting bigger, unless you're 3 to 5 million, maybe a little bit bigger, there's a certain time and place where you want to get a break even number per division as you're going up to maybe 2,3 million. Any of the industry consultants that are doing the financials, Sister Jim Houston, we saw at the landscape summit, we work with a lot of Jim's clients. Jim's going to keep that as a average break even across all the divisions. But literally the staggering thing, I think that got a lot of people's attention at the summit when I was on stage and I said anybody who knows the numbers, raise their hand. Well over 500 people in there in audience and you know, the lights are bright. But I couldn't account in probably more than 20 people in there that actually knew that number. But that's common. 95% of the people we work with to help build out these numbers don't know that number when they come in. And it's something liberating. But at a bare minimum, no matter if you're using software or not, I would say go out and get that break even number what it costs you to operate per man hour. Because like you said Mike, we're throwing it against the wall and it's crazy. You can be in the right market, you can put in the work, have your head down and grind and just get lucky and we've seen people get to 3 to 5 million just getting lucky. But wouldn't you rather know at the end of the day that that number you're putting out there is a number that actually is going to drive the.

Bottom line profit and sometimes also have the ability that, you know, a one or two year turnaround of your business going from unprofitable, being profitable actually have a way to measure that roadmap. Right. If you're only $2 above break even now and your goal is $10 above break even, it's nice to be able to kind of know along the way if you're improving and moving towards that, that goal. And data is the number one way to do that. So break even point. Super, super important KPI something to know in the business. What other inputs or financial requirements or data is required to do. Price matrices.

So the cool thing is with a lot of this you can build a pricing matrices based on the guesstimating system. Kind of. We don't really want the deep end Mike. If you can't swim in those swimmings, right, like that's, that's crazy. So the idea is we want to be able to graduate into that. As you're using a software that's doing job costing and production tracking in the reporting, even if you don't have the industry production rates, you can use the guesstimating and then take those variables and eventually take your own data and create it. So I don't know if that makes sense, but really I think later today we're going to talk about it. But what we really want to do is blueprint out the actual process to make sure it sends. Because Mike, you would never build a house without a blueprint, right? No, no, you're not gonna put random windows and doors in it. Why would you build a matrices whether it's guesstimated production without building a blueprint to systematically make sure your profit, profit margin around there. And when I went to become an absentee owner, the sheet I'm gonna show you guys later here, if we get into it, is literally the exact blueprint I used in my company to be able to delegate these things to my team where I wasn't the single point of failure and I wasn't needed to do these things on a daily basis.

Totally. Maybe could we kind of help someone walk through the process of finding their break even. And I may, I can spit fire some like random numbers for you and I think you have a spreadsheet maybe you can share with us to kind of figure out what that break even is and then we can move on in the process of getting job costing and price matrices actually installed.

Yeah, absolutely. I'm in the hotel room here, so see if this works. But if you can, I think you are on the wheels there. I'm going to have you give me some numbers. I'm going to blow this up. By no means are we doing financial consulting anymore. This is going to be a rough and dirty way to get at it. So the numbers are only as good as you give me, Mike, but we're going to throw some numbers in here and take a look at it. So hopefully everybody's using a financial software such as QuickBooks. But the first thing we're going to be looking at, hopefully driven from your payroll, is we're looking as. The only thing we're looking for, Mike, is not your office staff, not the estimator, not training. All we're looking at is the actual production for your guys and girls and your franchise or fictitious, whatever this company is. But basically when they clock into the shop to when they clock out, how many hours for this year were they actually looking at?

Are we looking like per day? Like just like one day on average.

I want the total of hours for the whole entire season. So let's say we started in January and we're as we're watching this, we're going to get up right up to the end of October and we're going to assume because we're near the 10th of the month here, close that, that those books are reconciled. So we have got.

So all my employees for the entire. For all my employees then for the whole year in.

In the field only.

Okay.

Do 5775.

5775. All right, there you go. All right. Next thing we're looking at is your expenses. So if we're pulling up QuickBooks, hopefully we have a budget. If not, this is something we want to look in the upper gear icon and set that budget. But Mike, what we're doing is going in under the reports on the left hand side in your QuickBooks Online most likely at this point. And we're going to be running a profit loss in an accuro basis. You're going to have two radio buttons, the one on the right. And we'll probably set that between January and the end of October here. Hopefully those books are reconciled. But we want to make sure these expenses line up to the production hours you just gave me. But if we run that report in a accural basis up top, you're going to have your revenue. And there's a cogs account. Cost of goods sold. So you're going to have your labor, equipment and subcontractors. I'm sorry, your. Your labor, your materials and subcontractors. Now some depending on your. Your accountant may have talked gas in here or fuel predominantly. Really don't want that in there. But if you're doing it consistently year after year and it's consistent, that's probably okay. But most likely, Mike, you got your labor costs, you got your material cost and your subcontractor. So we're get that total. And then if you scroll all the way to the bottom of the screen, we're going to have a total expense. And that's going to be your general administrative fixed cost. So when two numbers together, that's going to be the total expense that you've spent for the whole entire year for everything, including your office, your rent, the guys and girls in the field, you name it. Total expense. If you took your top line revenue and subtracted from that total expense, that would be left at profit. So I'm looking for a number for your total expenses for the whole entire year.

The whole year. So if we had like 5,000 hours, I'd say like let's. Okay, I'm just make it four. $458,606.

All right.

There's not the total cost. This is just cogs, right? Oh, and gna. So, so like kind of everything. Okay, got it.

Okay, it's all your. All your expenses in now, including that cogs account. We have materials and subcontractors. We're going to want to take that number and actually back it out. But they're actually included that 458 you gave me up top. So on that line item, was there any materials that your company actually used?

So now I gotta back this out number. Okay, so let's just give. Let's do 76,784 for materials.

All right.

No, and then I gotta take. I gotta take that. I gotta do a calculator, make sure I get this math right. And then let's do. For subs, let's do 62,546. And then that's gonna leave me. Let's see here. Let's do 27,000 for debt service, 27,125 for the debt service.

Well, wait a minute, Mike. You gave me these numbers here, and I'm looking at your P. L. Yeah. And that bottom line profit, whatever that was, you don't have to share it publicly for that franchise, if that's what you're looking at. It looks like you made X amount of dollars profit at the bottom line. So a lot of times people will go, well, really, based on this equation right now, based on my eyesight here in this small print is $55.29. That's what it's costing you right now per man hour per guy clocking in and out of the shop. Now the silent killer, Mike, as you well know, is your long term debt or payables do not live on your profit and loss. They live on this silent kind of killer where we usually don't look at. It's actually on your balance sheet. So if you go into your balance sheet, you've already done some homework for me before the call. But that's the biggest thing that folks will come in, Mike, and they'll say, Well, I made $150,000 this year. And then we go over to look at their long term payables and they've got 50 or 60 thousand dollars worth of debt pay. Now be careful as you're looking at this, Mike too. And I know obviously this isn't the case here, but depending on the tax season, your account for tax purposes may accelerate this depreciation. So general gap principles, we probably want that amortized over five years as a benchmark. But that number may be higher depending on the tax season. If you can write off trucks all in one shot. So Mike, what was that number? I didn't want to cut you off, but I would put some contacts that number because there's a lot of confusion around that number. Awesome.

Debt service.

Yep.

Yeah, 27,125 is what I wrote down here.

All right, so we're at 5529, Mike.

And just to clarify for everyone in that number, Mike, are we taking into account just the payments? Like if I have a $400 per month payment and 100 of that is interest and 300 of that is actual principal, am I doing the full 400 or am I just looking at interest expense?

Right now we're looking at the full payment. And like I said, this is a down and dirty way. There's definitely industry consultants for several thousand dollars over a day and a half, two days, we'll get this down. This number is pretty close though, Mike. I mean, I've seen it within 20 to 25 cents an hour and this number will get you there. The fortunate or unfortunate part is a lot of the industry consultants right now that do the finance. There's not a lot of them. Some of them are booked out, depending on the season, two to three months. So this is a rough way to get that number. If you've never had it. This is going to get you in the ballpark to start. So by no means am I saying this is the end all, be all. There's a single overhead recovery, there's a multiple overhead recovery conversation for a whole different day. But this number is going to at least get you in the ballpark within 25 cents to 50 cents an hour. If you don't know the number, this is a hell of a lot better not having it. But to answer your question, yes, it's the total long term debt payment. We want to have that built in.

Could you zoom in a little bit there, Mike, just so we can see the columns and the numbers there a little bit better. And I think it's super important because like when I fly out and do these turnarounds, for example, it's just a matter of so many of the times I get the P and L and they're making 40, $50,000 on the P and L and I say, well, does that include the owner's pay? And sometimes it does, but then what? So many of the times they're like, well, why don't I see $40,000 in my bank account? And sure enough, you look at the balance sheet and there's a whole bunch of debt. And if they're paying 3, $4,000 a month in debt service and all of a sudden that $40,000 in profit evaporates. And although it looks like you're profitable on the P and L, so super important because although if you don't take this into account, you could have a break even point that looks far better than what it should be and you still are running out of money. So it's another important key to add when it comes to the costing side of things.

Yeah, and this actually is in the ballpark. I'm seeing some of these as high as some of these large companies, 68 to $72 per man hour. They've jumped up significantly. But if you look at it, if you did not include that debt service, Mike, it was 55 to now 59. So I mean that's an extra four or five dollars an hour. So times 5,700, almost 5,800. That's a lot of money that we potentially are not accounting for. So as we're playing this out, Mike, so if we're basically 60 bucks per man hour cost based on this division what's your goal? What do you want to charge per man hour?

Well, in this example when we're saying that the break even is 59.98, are you saying that if we charge $60 we'd basically be at break even or is there other expenses not being accounted for Here?

This is all in.

Got it.

So charge 60, really be broke even as long as everything went to play.

Now, depending on the way that you're doing your financials and your kind of projections, was this where you would recommend giving more like a percentage of profit on top of that number in terms of hourly rate? Or how would you recommend someone go about figuring out what they should actually charge based upon this data?

Yeah, so I guess, I guess not a loaded question, but I guess it's really up to you and your business and what the desire is. Now there's some industry averages. If we're fertilization we control, we probably should be about 40, 45% net. Maintenance has got some other ones, design builds, got some other percentage. So it's really, it's up to you where you want to be. I'm going to suggest you need to be at least double digit profit margin, at least 10% industry average. Landscape maintenance is about 4 to 6% net from the last industry average I saw. As far as I'm concerned, if you're not making double double digit net profits, you might as well be the greeter at Walmart, a lot less stress and probably making more money at that point. So I'm going to suggest at least double digits. But you know, probably 18 to 20% on maintenance and 45 to maybe 47 net on your fertilization, weed control. So I mean if you went in here, you probably, let's just say fictitiously we're at 75 bucks. If we went in and just went in and delete divided this out here.

And I apologize, this is taking a hot minute because I don't have my other keyboard here.

And I think what's so interesting here too is a matter of like if someone say was at 6$65 per hour, they'd literally be making $5 per hour in profit, which is about 8 to 9% profit margins. But what's crazy is if they could just get that rate from 65 to 70, they would literally double their profits. And that's what's always so amazing about the home service industry is that raising your prices, despite what we think about price sensitivity of people in the market, despite that, if you're able to get enough value to where you can raise price by just five bucks an hour, you could literally double your profits. And so that's exactly, exactly.

And we talk about it a lot and I think we both do on a lot of our Facebook or YouTube videos is non emotional data and just it takes the emotion out of it. You literally like it is what it is. Are we going to run with this for a whole different other conversation too? Underneath here is like the little formula that we do when we do CRM setups such as copilot. When we talk about labor burden, fic, unemployment, workman's comp. Those are some things as the job costing reporting develops into copilot. This is a number that you're also going to want to know because you're going to want to know what the hourly rate is with loaded with labor burden for regular time and overtime. So that's another number we could definitely talk about a later time. But at a bare minimum, Mike, for today's conversation going into the matrices, the bare minimums, you really need to know this break, even if it's a larger company, like 3 to 5 million, a little bit bigger, we may want it per division, but right now if you're 4 to 5 million or below this number probably will suffice. Construction, design, build projects may be the anomaly because your workman's comp and some of the stuff is extremely high there. But like I said, what I like.

About this Mike is the fact that like someone can just literally take last year's P and L and and figure this out. It doesn't take projections or time motion studies or like complexity and maybe there's a little bit of accuracy that's given up in that. And so like I just want to warn people getting it done and I believe this is 98, 99% of the way there is far better than just not doing it at all. And that's what I see so many times people doing because I've seen some illustrations and some examples where you're breaking down the cost of the fuel inside of every single trimmer. You're breaking down the cost of the tires and the brakes. And it gets so convoluted and complex to where when the data gets spit out it's like, well, you literally had 500 data points you could have messed up on if you fudged them all by 10%. Now all of a sudden the number at the end doesn't make sense. And so I like the fact that it's simple. I think the one thing is would this be a Little bit difficult to implement in terms of projecting going forward. If you were changing what type of services you were offering, for example, going from more project based to recurring, could that potentially for the people that might be doing that in their business, throw a monkey wrench in this slightly in.

Terms of running projections, you could forecast off of it. It's gonna, it's significantly better than not having anything at all. And you know, for a whole different talk we could go into that more as multiple header recovery system. But Mike, you nailed it. There's about eight different tabs, there's about 15 to 20 things in each tab. And that, you know, first draft's better than no draft. This is going to get you within 20 to 5 cents to maybe 50 cents an hour. But we've compared this to some of the industry consultants and literally sometimes within 15 to 20 cents an hour. And that's anomaly based on all those data points and those sheets, this is going to get you there. And the idea is now we have this non emotional data to get into those matrices inside the software or the Excel sheet and now we're pricing without emotion.

Right. And I think so far we've kind of built this three tiers of like information that's required. Number one, we need to be able to make sure that we have good, a clean P and L. Like the numbers we're pulling from here, the inputs require you to have a good P&L. That is like your personal expenses are separate from the business expenses. You're categorizing things correctly. That's the first layer of information. The next layer based upon a good P and L, we're able to now figure out what our materials are, what our subcontractor costs are, what our total man hours are. So let's assume another piece of inputs that are is important to get eventually. Now to the most important question is how do we use this to actually create estimates where we don't ever lose our shirt on the job job. And, and really what do we need to break out for an estimate and create a solid estimating system?

Yeah, absolutely. So I mean you're really at a bare minimum you're looking at your labor. So really what you're charging per hour and your break even you have your product with your product markup and depending if you're heavy project based you may have your equipment. Now depending on how you formulate this, that's where that multiple overhead recovery system may come into play because you're going to tap your labor, your equipment and then general administrative costs. And three different multiple overhead recoveries. But for this example, if it's not built into this, and let's say we're renting a skid steer or dingo for a one off project, we can build the equipment in. So labor, product and equipment.

Got it. Cool. And so do you have an example kind of of this in action in terms of an estimate or a job being done? We can see kind of how this figuring out the break even numbers and figuring out all this data kind of kind of bring it full circle.

Yeah. So I've got a job costing example of an actual completed job. Or do you want me to actually go in and actually build the service out and show you an example what how these numbers pull into the actual job itself?

Let's do the completed one, then we'll kind of fill in the gaps as we go along.

All right, so I'm going to shrink this down just a little bit here. But up top we've got a mulch installation job. So this is kind of the back of the napkin job here. But we budgeted.

Here 10 hours of or budget of 10 yards of mulch here. So as we put this in, we've got 10 yards. We believe in an industry standard for one guy or girl. It's about one hour per yard installed labor materials clean or labor and cleanup. Our product costs, we're going down to the wholesaler down the street. Each yard of mulch is costing us 38 bucks and our.

Product charge right here is 47.50. So we're marking it up from 38 to 4750 a yard. Those were our assumptions as we went to look at this job. Does that make sense on a high level, Mike, before I kind of dive into it makes sense I can bump this out. So what you're going to see in hopefully the software I built this out in Excel sheet. So each software is going to show it a little bit different. But you're going to have the client name Old Acme Inc. We did a mulch install. So crew number one here I got Mike A and Mike C. Both about the same height and size. So we were going to power through this one low center of gravity. We've got those wheelbarrows and shovels. But we clocked into the job, Mike both together on the job together at 8am we left at 5:15 and we had an hour break. So we had math is looting here but about 9 hours and 45 minutes or a little about. So about 9 hours and 25 minutes after our Lunch break. We budgeted this job for 10 hours.

Based on the 10 yards. Well, Mike, apparently one of us was a little bit slow that day. We were out there, but it actually took us 10 hours and 15 minutes each to do that. So the total hours was 10.5 or 20.5 hours. So as you're clocking in and out of a software, you're just manually adding this excel sheet. We're taking the actual time on the job minus any breaks, and we were budgeted 10, and we were almost double the budgeted hours. But I will tell you, in the lawn care company, this was not uncommon. If we've got a players, or maybe sub a players, if we don't tell them how long it should take, they're going to take as long as they. They see fit. So right now, Mike, we're. Our variance is the difference over under. So our variance right now is we're 10.5 hours over budget. Now, obviously, if it's costing us, in the other example, almost 60 bucks an hour, that's not good, right? Cost us an extra $600. So as we scroll through the sheet here, the reporting in the software, the excel sheet, depending we send it out, would be, we have a total of two men, and we're budgeted for 10, and it took us 20. So we're over budget by 10.5. Our labor rate. So this is how we're going to set up. The reporting is we want to look at our labor and our product with product markups. Our labor rate that we were charging is 1754. And our overhead cost was 605. This is what we did. So the difference between those would be our profit. And we had our actual product cost and what we charged for the product. So it cost us 950. We charged 1187. The total job was 22,930 bucks.

Mike, so how did you come up with the. How did you come up with the budget overhead cost on that one? I know we kind of glance through some of that there.

So we took the 20.5 hours and times it times our break even in this example, it was actually 65 bucks here.

Got it.

So once we have that.

In this.

Example here, we budgeted 10 yards. Well, the reporting, we're also probably gonna look. How many yards do we actually use? Well, we budgeted that job to be an inch, but they went out and did it about two and a half, almost three inches. So they've overdone that. We had the dump truck full. They just kept going. So that's another possibility that can happen. So I'm not positive. I don't think that actual yards plays into this equation below. It was just really the labor. But I wanted to.

Actually show you. Yeah, so the product here is identical, but this is another after effect that can happen here. So really you may hit the budget hours, but they may use double the product. There's no tracking on that. But the idea here is if we went in for this job, the actual here is on the left. But the budgeted was we should have a 65% profit margin. So we're charging 1742. And based on 10 hours times our 65 bucks, now break even. Our cost is 605. So the profit on that would have been about 1100 bucks. The product we're charging 1187, it's cost us 950. 237 was our profit. We had a 20% margin on that. So all in, we charged 20 or 2900 bucks. We made 15, 555. Or expense was. I'm sorry, our product and expense was 1500. So we should have netted bottom line profit about 1300 bucks. 1375, that's a 46 margin. So I didn't actually play with the yards of mulch here. As you can see the 1187 here in the 20% identical. I'm just showing the effect of over budgeting with the labor. So literally, if you're looking at it, we should have cost US labor in 605. It ended up since we were over budget, Mike, by almost double. It cost us 1300. It's not terrible. We still made some money, but we were literally almost 40% less profit on the labor end products. We still had our margin, but what we did, we charged 2,900 bucks. Expense was 22. We made 647. What we did is we left a bottom line profit loss on the table. 727 bucks.

So the software is literally a doubling. But by having going from 647 to what was projected at 1300 would literally double the profit of the business.

Exactly. So on a very high level, there's things that we're looking at. We should have a good start and stop time from the crew budgeted hours, how long it should take. And believe it or not in the software, dollar amount. Because if you're doing like flat level billing, a lot of times people will kind of like not put a budgeted time or price depending on the software on the actual line item. But if we get good start and stop Time, we get a budget time and a cost on the labor. And we have product and product markup with a budgeted quantity that we can check. You've got all the keys for the software, even an Excel sheet to track all this. And that's what this, you know, fictitious example is here, of start and stop budgeted times and then what the actual was and what was the total charge broken out. But you got variables.

For the more cynical person, Mike, that looks at that as like, okay, that's a bunch of math. And it's all looking in hindsight that I would actually get the math of the actual versus the budgeted. Can you, can you speak to that person and hopefully convince them that not only like the difference, obviously we saw the dollars at the bottom of the difference between budget and actual. But how is it actually going to make my crew work better or how is it going to make me more accurate in the future? Because this is all this historical data that took me, let's just call it a few minutes or even five or ten minutes if I'm doing it manually to, to actually get this information. Why is this information actually valuable?

Well, you're really flying in the dark. So on the first thing A, financially, you need to make sure that you've got accurate numbers for your budget. So if we're going from a half a million this year and we want to hit a million and we have a projected profit, if we don't know where we're going and how we're getting there and track it, we're never going to get there. But the secondary piece too is with the labor market right now. If you're hiring a players, Mike, they want to know what winning looks like. And this ties right in for the P4P system. And they want to know if they're winning on a daily or at least a weekly basis. Can you imagine going to a sports game with no scoreboard? Those athletes aren't going to stick around so long. The crowd definitely is going to stick around because there's no scoreboard. So if you're sending your guys or girls out to mow lawns or put mulch in and you don't tell them how long it should take and what the parameters of success look like, they're going to probably do just what we fictitiously did. They're going to take 10 hours or 20 hours basically to put 10 hours worth of mulch in. And if we don't tell them how much product they should be using, they're just going to put it on and probably 3 inch depth instead of an inch and a half to an inch top dress and we may have bid. So it's going to give that clarity on the employee level. It's going to create a culture of consistency and driving towards that goal of profitability. And B, it's going to drive your financial success, your business. And now it doesn't live in the owner's head. Anybody can do it.

And I think by doing that for every service and every job using the software, it allows you to actually see which services are most profitable. Because let's say you, you pay someone 25 bucks an hour or 20 bucks an hour. Well, if they do five different services, if you actually run the job cost, you might realize that one of those services, you're at 40% profit. Another service you're, you're losing money on. But because you're, you're, you're average, you're, you know, 10, 15, 20% profit. Okay, my business is doing fine and maybe even that employee is efficient. But, but when you actually break it down based on every job and then break it up by services like, oh my goodness, like I am making all of my profit in this one service, maybe I should double down more on that or maybe I should raise prices on this other. Have a different labor rate for this other service that I'm losing my shirt on.

Yeah, exactly. I break it out per service or per division with the labor rate. The break even as we took it as a general, as an average across. And the other thing that this data, if you've never seen it, looks probably overwhelming. But the cool part about it, Mike, is I can run this now at the end of the year, coming in November, December, and I'm going to probably suggest running the report again in probably July. We did it the week after fourth of July. But we're going to raise our prices, but we're not raising them. This may stir up some debate, which is. Okay, drop your comments below. Happy to hear about it. But basically we're not raising our price unless it's like fertilization and your product cost goes up 15%. That's a different story. But use the lawn mowing example. It's really basic. We're not raising our price by 3 to 5% each year because really what we're doing is we're alienating our most profitable clients. And what I mean by that is if our goal now is 65 bucks per man hour, in this example we just showed, we're going to price everybody through the report, that's below 65 up to where they need to be. But anybody above $65 an hour, we're leaving them there. So you've got clients, you're making 100, 125 bucks an hour guaranteed. When you do that price increase as a across the board percentage, what you're really doing, in my opinion, is you're taking your most profitable clients and literally asking them to shop you. So similar to Jack Welch and GE, he took the bottom 10%. We're not emotionally taking the losers that aren't hitting your revenue goal. And we see it every time when we work with clients that like literally run this report. You're losing 20 bucks every time you show up to that launch. Just drop off at 20 and keep on going. It's going to be a lot quicker and easier.

What would you say to the person that is actually the opposite? We've kind of inferred so far, which is people not getting into the numbers. For someone that's kind of OCD and gets really, really into the weeds of this stuff, for example, they're listening to what we just said and said, well, you know, you got budget hours and they're beating budget hours. But then because you drive 30 minutes outside of your route to go visit their property, you're actually not hitting your hourly rate and you're losing money. And this number is not showing me this because it looks like I'm beating budget hours. What would you say the person that actually gets too much in the weeds? Because I've seen this subset of owners that literally spend so much time figuring these things out down to the penny that they actually don't focus on implementation of what this data is telling them.

Yeah. And you got to go deep and stay the course. You got to start with something to iterate off it to answer directly kind of your your question. And I think there's probably a few people watching this thinking the same thing with non billable drive time. Mike, the cool thing is that rough break even that we built actually includes your non billable drive time because it's from shop to shop. So if your non billable drive time as it goes up as we grow, doesn't go over as a percentage and it is technically built into the 60 bucks per man hour break even that we built out with your numbers. So long as that 30 minute drive is on average within the normal progression of growth as that percentage, it's okay. It's built in. Now we want to run some reports eventually when we have the acumen of direct labor costs on Site and direct labor costs that was at labor and labor burden from non billable time to make sure that percentage is up. And as AI and different reporting continues to go, then we might be able to focus in on where do we need to build route density between the stops that don't have enough density.

Okay, two questions before we head out. One is for someone that is has never done job costing, they literally, they might know their hourly rate. I think most people watching this, they know if I asked them, yes, I charge 70, I charge 80, I charge 90. What would you say are the steps to go from that kind of guesstimating and then at the end of the year you kind of come up with your profit percentage. What would be the few steps you might give of the progression to go from that to actually knowing your numbers on every single job?

So if you're saying just basically knowing your numbers on every job, far as what you should charge, is that what you're asking?

Both, both that, but also being able to look back at the job and be able to actually see the breakdown like we saw of budgeted versus actual. Yeah.

So foundationally we need to actually set up the service first with a budgeted time and cost. And once we have that we can evolve into tracking the data. The other thing, depending on where you're at in the United States, Canada, Australia, doesn't matter. UK we work with clients all over the world. But there is some seasonality pretty much unless you're like southern, southern Florida. But even there, there is some, some, some seasonality far as production based on the season. So you need to at least have a statistical mean of 15 to 20 visits like on a lawn mowing, because you're capturing, you're catching the, the lower production in the spring or double cut and blowing out when things dry out in the summer. And then you kind of got somewhere in the middle of the fall. So we need to have a budgeted hour that we want to hit for our revenue goal. But we need to have a big enough statistical mean of data. Like one or two cuts is not going to be enough data to actually make that decision. Especially the seasonality like shrub trimming. Maybe two or three visits is going to be enough because it's going to average the first pruning where there's more heavy pruning and then the second one is probably more of a maintenance pruning. So it's going to at least average them out, grab the high and low. But mowing things like that, even fertilization, you want to get at least three or four rounds in before you start to. To really have a knee jerk reaction.

Very cool.

And obviously I think both you and I would agree that, you know, the software is really what makes this simpler and easier and more repeatable in someone's business. And, you know, simple growth is a fantastic resource for people to actually have it done for them inside their business. Figuring out these numbers At Copilot, we're launching job costing price matrices December 1st. We're super excited about it. If someone has never done job costing in their software before, our goal is to try to make it where it's a little bit more appealing for the beginner to get started and then go deep on the numbers. Why? What would you tell someone that has done software before, maybe have a big business, never done job costing or price matrices, but now they have the software, whether being copilot or elsewhere, to be able to actually run these numbers. We're heading into the winter here, cutting edge. You're in the middle of November, we're rolling into December. Is this the right time? And when you see your clients coming into you, is this the time to actually take some time figuring out these numbers, Put the numbers in the software? Like, what's that process of trying to figure out whether or not these numbers are accurate? Yeah.

So I don't know if you have some time, Mike, but I can. If you've got an extra few minutes, I can actually show you what I'd recommend. But it kind of the old saying is, you know, when you plant a shade tree, well, ideally 20 years ago, when's the next best time? Now. So yes, going into the winter season is the best time. If you're watching this, if it gets reproduced in a YouTube video or something, you're watching this in the middle of the summer and you don't have these numbers, do it, take some time, get away from the office for an hour or two, whatever that looks like. And I'm actually, Mike, I'm going to break it down here. So obviously we help people do this, but in the mindset abundance, I'm going to walk through how we would actually set this up in copilot here in a fictitious example, but we've got a lawn mowing example, mulch installation and shrub pruning. So the first thing you're going to want to do eventually is grab a variable custom field. But what I would do is if we were working with Mike, you came to me as, as an Augusta franchise or just somebody else on the software, we would probably go in and Take a list of all your services inside Copilot or whatever software using and take an inventory. But we would go in and break it in division. So for real simple simplicity here, minus my keyboard, I'm going to say all these guys are going to fall in our maintenance division. Interesting enough, when we went to our financial break even tab that Mike and I just went through, our break even is 59.98 and we're charging 75 an hour. So what we've done is driven this in to 75 and 59 an hour. So that number has come down. Now Mike, obviously as people grow these softwares kind of the mindset of abundance. I don't want to just give them the fish, I want to teach them how to fish. The idea Mike, is on a high level. People are doing this go build out your divisions but that in your break even would go across each division. So we had fertilization, we had construction, but start to put these in the divisions that they're going to lay in. Azure continuing to grow because we've used this template up to companies at 33 million so it's a scalable piece. But the idea on the most simplistic level not to get the weeds completely is we've got these three services and we're charging 75 an hour and our break in is 59.98. So we're going to do is go into division one which is we've labeled our maintenance division and those numbers 75 and 59 have come in and have done a little homework beforehand. So those are expenses. So this is a whole lot to look at, Mike, but I want to give a high level. So if you're going in, this is your blueprint. This is the blueprint to build the house. We're going to blueprint to build the service. So as we're going in, depending on the software and copilot this is very applicable. Our custom field type is either going, it's going to be a number and the service type is going to be per unit and the rate matrices calculation is quantity rate times, visits. Now I'm going to get into this in copilot here in a minute, but I'm giving you the exact formula you need to do to set this up inside copilot. Now as we scroll over here, just because the screen's a little busy, kind of looks like somebody puked on it, let's be honest with the yellow cells, we type it in. So this is something we do hundreds of times a year. This is scalable for My team. But we've got that lawn mowing service, Mike. So I've just copied that over, and as the business owner, I'm gonna. We'll walk through if you're working, Mike. So, Mike, do you have a base price to show up your lawn mowing? The whatever the lowest price you would charge to drop the gate, usually $45.

Per.

Depending what size and mower it's going to vary. But you may be using a 22 inch push commercial. You may be using a 60 inch or 72 inch. Doesn't really matter for this conversation. But to mow, blow and edge and stick edge, potentially depending on the market. What's the maximum of square footage? And this is fictitious, Mike. It doesn't have to be perfect. So by all means, guys, if you're watching this, do your own homework on this. Mike and I are just kind of wrapping back and forth the process. But, Mike, what's the largest area tur square footage that you would cover for 45 bucks?

We'd probably max out. Like this is smaller. So 3,000 square feet. Let's do that.

Okay.

All right, so based on that.

45 bucks an hour, and I'm going to divide that by your 75 bucks per hour. So I'm going to tell you, Mike, point six man hours is the maximum time you can take. Now, you might be like, Mike, I have no idea what 0.6 man hours is. So I'm going to do a little equation here for us just to see what that is. And that is.

36 minutes. So we're always basing our matrices in Copilot or any other software, as I'm aware of, on one person. But, Mike, for one person to mo blow and add to the 3,000 square feet, and that's probably getting the equipment off the truck in the beginning, too, and whatever else they need to do. What's the maximum amount of minutes that you would give them? Now, the maximum is 36. But how long do you think it would take your guys and girls, based on your company?

Probably 20 minutes tops.

Okay, so that is 0.33 man hours. So thank you for using some even math and that put me on the spot here to calculate that out. But what we've got now is between one and 3,000 square feet. We're charging 45 bucks. It's going to take 20 minutes for one guy or girl to do that. 0.33 man hours. And based on that 59.98 mike that we came up with, it's costing you $19.79. So on the base price, you're making $25.21 here. And your profit percentage is 56% net. As long as everything goes to plan. Now, remember, we said it was only 20%. So people like, why doesn't the math add up? We've overridden the maximum budgeted time. So tradition you're going to find. You probably see this a lot with the Augusta franchises. The most profitable lawns are probably the smaller ones. We make the most amount of money on our base price. Now, we could stretch this out to a whole acre, but for today's conversation, I'm going to say every thousand Square feet over 3000 is x amount of time. So if you said.

Mike, it's going to take.

Let'S call it five minutes per thousand divided by 60, that's 0.08 man hours. So based on your rate, Mike, that's you need to charge $6.25. It's taking you six minutes and it's costing you $5. So what we've done is created a blueprint. So we've gone in and now assumed what is the profit. Profit percentage. So, Mike, if we're going through 10 or 15 services with you or you're doing it yourself, this 20.02% should consistently work its way down the screen. And if it goes down to 3 to 4%, like, wait a minute, pump the brakes. Is this a loss leader if we purposely set this up or do we need to go back and look at it? But the idea is we test it, we blueprint it, and then we drive it into the actual software like Copilot. Now, there's probably some naysayers here saying, well, I don't know how long it takes, which is okay, we can do a time based system, Mike. So this example is going to be lawn mowing man minutes. And I did, did forget to put our custom field there. So our custom field on the first one is true square footage. Our custom field here is literally lawn mowing man minutes. That's the variable, Mike. So as the expert, you're gonna go in and look at it and go, well, how many minutes or hours do I think it's gonna take? And Mike, you said that our minimum price to show up is 45 bucks. So everything up here is identical. But now it's time based. So if I went in and said literally.

That times 60 minutes. So we have minutes, basically it's 19.8 minutes. So we round that up. So if you plugged into a form or some way of tracked and you said between one and 20 minutes the system's going to calculate 45 bucks. It's still going to take the 20 minutes as it did up here, the 0.33 and it's costing 1978. So what you've done is been able to evolve from your guesstimating to eventually production rate. Now it gets a little bit different on the bottom mic here it's every one minute over the 20 minutes and 0.02 is one minute. You need to charge a dollar fifty a minute. So if 60 minutes is an hour, that makes sense. If it's 75 an hour and it's costing 120, but you can see the profit percentage are the same. So that's how we would evolve into this. Now I'm going to show you in a minute how we take this data and actually get it into copilot with new matrices. But I want to show one more example. We've got a second here because now we've got a product based and a labor based situation. So mulch installation.

Is going to be our custom field. That's our variable bed square footage. So let's say we're going to do a 3 inch depth. So an industry standard is 3 inches would cover 100 square feet. And if we remember our production rate for 1 yard of mulch is 1 hour for one person.

So from 1 to 100 square feet is $65 actually. So it's going to be on this example 1 hour times are 75.

So every yard we're charging $75 in labor, it takes us an hour and it's costing us 59. So that point that 20% is there. And then in this example every hundred square feet over the first hundred is another 75 bucks an hour and 59.98. So this is the same exact process I used in my company, Mike, where Paul that ran the company and the estimator, Paul originally did the system, he had never cut along commercially. He was a commercial pesticide applicator for a golf course. And within about a week or two Paul was able to take this data and literally do HOA bids of 40 or 50,000 within 50 or 60 bucks of what was in my head over 25 years because we created a plug and play system. But we have the guaranteed release, the projected profit margin and the budgeted time that now we can do against the actual time. And the final solution here is we're going in.

Well, Mike, we can't possibly standardize shrub trimming or something like that could we. Well, we can with time and motion studies. There's industry standards we use. But you can do your own. But we can do a small shrub, less than three feet, a medium shrub, three to less than six and a large six to ten. Same idea, Mike, but what we would do is put in the budgeted hours. So I'm going to use these fictitious. So I don't give the whole whole show away here. But let's just say it's five minutes for a small shrub. We plug that into every shrub we kick in, it kicks out $6 and 25 cents. Let's say that we're doing a large shrub at one point or a medium shrub, a 0.16 man hours. So every medium shrub has got to be at least $12. And then every large shrub, let's put that at 0.3. Next, kicking out at 2250. Now we can go out and do linear feet of hedgerow, both sides, with or without a ladder. But the idea here is now this is going to be all stuck in your software, such as Copilot. So it's a lot to digest, Mike, but I'm going to pop this over and kind of put some context to this. But do you have any questions before I hop into that?

No, that's excellent. We're coming on the hour limit, but go ahead. Yeah, let's. Let's kind of see the end result of all this information, but now in the software and hopefully a little simpler than having to create Excel documents all the time for people.

So real quickly, once you have this sheet, the top five lines here on our mowing, the 1, the 3045.33 in the 1975 are literally going in now in Copilot. And I know this is going into beta, Mike, but literally it goes into these top five lines right here. And then the bottom five cells here are going to line up with these bottom five cells. Once we've done and blueprinted it, we've confirmed our profit projections, we're going to actually go in and plug that into copilot. And if you remember in the beginning, Mike, I said, what was it per unit, what was the custom field? And what was the calculation on the far left? We've given you those data points. If you watch back through this again, we have it. But eventually, on the back end of Copilot, we're going to be able to create an estimate with the custom field. The quantity, the rate, either one visit or 30 visits, total cost, budgeted hours, total budgeted hours. Cost and projected profit and profit margin. So.

Time does not evolve that. But basically I was going to mock out a version to build out those services. But really in its simplest form, Mike, we're plugging this data in once we've confirmed it with our financial numbers and when we go to schedule those jobs and copilot now we have a budgeted price, a budgeted time and a cost before profit on the labor product with product markup and potentially equipment being allocated in the software.

And ultimately, I think what's so awesome about all of this is the fact that it's going to help create a system in the business for the office people to be able to actually get pricing, for the estimator to be able to actually give accurate pricing without you as the owner having to be there and leaning on the system Instead of your 10 years of experience behind your eyes to determine how long a job is going to take to determine how many yards of mulch is going to take and making a more repeatable process. Absolutely.

It's rinse, repeat, non emotional. And now you as a business owner are not the bottleneck to growth. Anybody in the office, call center or virtual assistant can sell. And if we're going in and downselling to our core gateway services over the phone, it's a rinse and repeat system and hopefully we can build matrices around the other services we're going to upsell to build that client ticket value. I know you talked about at the summit same exact thing we did at Callahan's lawn care and it made it rinse and repeat system. But once we have these matrices now we have non emotional numbers to base the actual time with and we can raise those prices. We need to or leave them the same.

Awesome. Well Mike, I really appreciate your time and I know that as we build out job costing and price matrices over the next month or so and launch it, you'll be a big part of that simple growth. And for everyone that's listening, you join Copilot and you need help building these models and understanding what these numbers are. Simple growth is the one stop shop. I highly recommend them. What's so beautiful is that Mike gives the information away, but then it's a matter of if it's still overwhelming, just have someone else do it. You're probably much more likely to get a better bang for your buck spending time on your business than trying to figure out Excel and numbers and all these, these spreadsheets. I do recommend simple growth a lot and just once it's set up, you can then use it for the rest of your business's life and really make it worth its while. So thank you so much for your time. Mike, I know in the future you'll be making some tutorials and help guides for the users of Copilot, but just want to take a moment and say thank you for all your work and giving out to the community.

Yeah, absolutely. Take a look. I know we've been a little shy of pumping a lot of content in the user group, but we will be going in there with Mike's permission and providing just literally value how to do it because in the mindset abundance, this is something that you need and I wish I had in the early days. Now it's available through technology, so we'll be out there to be your resource. And Mike, thanks for everything you're doing and raising the level of professional in this industry.

Okay, now every single day here at the Cutting Edge conference we are launching something that I feel is super awesome at Copilot and it has to do with our topics and I've already discussed it with Mike today, but December 1, 2023, Copilot CRM is going to be having job costing and price matrices. Now this doesn't come as a big surprise because Mike has already shown some of the screenshots and already worked with some of the numbers and how we are set up Copilot CRM to do price matrices and job costing. It'll save you a lot of time and if you're like me, Excel is great and all, but it kind of gets a little convoluted and there's too many options to do things. So we've tried to make it as simple as possible for you to be able to do price matrices and job costing, understand your numbers, understand your profitability, understand that when you do an estimate exactly what your profit is going to be before the job gets started. So coming December 1st, in copilot CRM you have the ability to do job costing and price matrices. Over the next several weeks we'll be making sure that it is a level of the software that you turn on and enable. So if you're not using it, it doesn't make things complex. You saw the one screenshot there of us working on the estimate he was creating and all those fields. That's too much if you're not using job costing and price matrix. So we're going to make sure that down the road we make sure it is kind of hidden and you enable it on your settings if you want to use it, it'll be for enterprise level users and I'm super excited. We will definitely be iterating on it with Simple Growth. They've been a huge partner of ours and helping us. They don't pay, we don't pay them. They're just awesome and they want to see this, this, this industry progress, they want to see other business owners succeed and obviously if you want it done for you, they'll do that. But they've been so accommodative in terms of giving us the information of how to do price matrices, how to do job costing. They're helping us refine right now the last stage of our sequence automations as well and they have 10 different things that they've now given us that hey, these are the last 10 things you got to nail and then sequence automations are ready to go. So I really, really do appreciate simple growth. I appreciate Mike Callahan and I'm really looking forward to December 1st being able to offer price matrices and job costing, especially for a lot of the large companies. Over the past year, almost a year that we've been in co have copilot, it was eight months, nine months that we've been doing Copilot. A lot of people have said, hey look, when you get job costing and price matrices, I can jump in. So I'm happy to say after December 1st that'll be a go. There'll be refinements throughout December but I'm confident by January 1st it'll be ready for prime time and you'll be able to use it flawlessly. We'll be working closely with Mike Callahan and his team at Simple Growth to ensure that if you've used other softwares in the past that have these job costing and price matrices, we institute and use that technology but we also make sure it's simple to use. It's actually making a difference in your business. Now if you made it this far, there's one more thing you got to do and that is register for tomorrow. All right, day three of cutting edge conference. Mikendys.com day three now the three is just a number so D A Y the number three mikeandys.com day three type that in and register. Now the reason is because at the end of tomorrow, whoever is registered for tomorrow is going to qualify for the giveaway. Now Only the first 250 people that get take advantage of the offer. Can I actually do it? Because it literally is going to cost me more than what my monthly rent and my house payment because I have different houses, I have a house that I rent out And I also rent from myself in my house. The cost of this per person will cost more than my house payment and my rent. And so I think it'll be a really good offer, and I think it would be really, really helpful for a lot of people. And Only the first 250 people we can honor it for, because I know there'll be more. The past couple days, we've had well over a thousand people register for the event, and then people have seen it outside of the registration is well into a few thousand now. And so I know a lot of people are going to see it, but I can only honor the first 250. So please go to mikeandys.com day three, register for tomorrow's event. And tomorrow is going to be amazing. We're going to be talking about how you make your marketing and your ads so incredibly good that customers feel stupid saying no to your offers. And I really think that it'll be a framework by which you can use to grow your business faster, but more importantly, market to your customers in a way that they read what you're offering and they're like, what in the world? How is this even possible that they're doing this? I think it's going to be super helpful for you to break through, whether you're growing, whether you're trying to add more services, or whether you're trying to just increase revenue. So it's gonna be a lot of fun. And at the end of that event, I will do Q and A tomorrow. So day three, that's tomorrow. You need to register, go to mikeandys.com d a y the number three and register for tomorrow's event. I just can't wait for it. It's gonna be awesome. So tomorrow's event, book off a couple hours because I will be speaking for the first 30, 40 minutes with a keynote, and then I'll be doing Q and A for quite some time. And during only that time, will you be able to take advantage of the offer? You'll have to be live tomorrow. So please. Mikeannies.com Day 3 and that's the only way to register. It's the only way to be able to take advantage of the offer. And it is the only way to be live if you're going to be part of the 250 people. So I can't wait to share what I've been working on. And I think the. The essence of what I'm talking about is going to be super beneficial for your business. So thank you all for day two. It was awesome. Thank you so much. Mike Callahan thank you for sharing your knowledge. I hope it was helpful. I know it was in the weeds, it might have lost some people, but watch it again. The recording is going to be up and I think it'll be really, really beneficial for you and your business. Until tomorrow. I'll see you guys tomorrow. Keep your questions if you've been writing down some for the past couple days, I don't usually get to them in the comments, so please put them. Wait. Wait for tomorrow. I will do Q and A. I might do some live call in after tomorrow, but you'll want to be live for the end of tomorrow's keynote. I can't wait to see you guys there.